Pankey Inc.has a $700,000 investment opportunity that would involve sales of $1,050,000, a contribution margin ratio of 40% of sales, and fixed expenses of $325,500.The company's minimum required rate of return is 18%.The residual income for this year's investment opportunity is closest to:

A) ($31,500)
B) $0
C) $94,500
D) $124,600

Residual Income

The amount of income that exceeds the minimum rate of return on a project or investment.

Required Rate Of Return

The minimum percentage return an investor expects to achieve from an investment to make it worthwhile, considering the risk.

Contribution Margin Ratio

The percentage of each sales dollar that remains after deducting variable costs, used to cover fixed costs and provide profit.